Waymo’s Commercial Ride-Sharing Service: Why It Matters

As Waymo goes from letting a select group of consumers hail free rides on (mostly) self-driving cars to charging some of them for the service, it’s not a huge leap forward, but still a significant one.

The Waymo One service launched in the Phoenix area on December 5, after more than a year of “early rider” trials involving hundreds of non-paying customers and some truly driverless rides. The Google-backed company had said its commercial service would debut by the end of this year, and it has, though for now the cars used in Waymo One will have safety drivers on board. (Fully driverless testing will continue with unpaid riders.)

The plan is to gradually expand its coverage area and in time allow anyone to hail a ride.

The fact that what was expected to be the first driverless taxi service still has drivers is a reminder that autonomous vehicle technology has been a steeper challenge than many of its champions believed, analysts say.

“It’s not a smartphone,” Gartner analyst Mike Ramsey said in a phone interview with TU Automotive. Because life safety is at stake, it hasn’t been possible to push AVs out into the world and just see what happens. “They’re being ultra-careful, and that’s fine,” he said.

Launching a commercial service is a critical step, because the business side of the driverless equation poses its own challenges and unknown outcomes, said Navigant Research analyst Sam Abuelsamid.

“The technology may be great, but if people aren’t willing to use it, you have a fundamental problem,” he said in an interview. The launch of paid rides (though Waymo reportedly had charged a few early riders before Tuesday’s launch) begins the long process of determining whether consumers will pay for robotaxis, and if so, how much, Abuelsamid said.

The commercial aspect is one reason Waymo is putting safety drivers on board, he said.

“What they don’t want to do is get into a situation where a vehicle struggles with a scenario, and there are paying riders on board, and something goes wrong,” Abuelsamid said.

Certain traffic situations, including some left turns and merging situations, reportedly have befuddled Waymo cars as recently as the past few months, though in 2017, the company led all others testing in California in the average distance between incidents where humans had to take over.

Technically, Lyft and AV technology company Aptiv have been offering paid autonomous rides with safety drivers on board in a Las Vegas trial since early this year, though not under a separate branded service. But Waymo still is probably two years ahead of the rest of the pack, as a rough estimate in a young and rapidly changing industry, Gartner’s Ramsey said.

That head start will allow Waymo to shape the robotaxi business, he believes.

“Everyone is watching what they’re doing and will follow that blueprint,” Ramsey said.

“I suspect that everything everyone else does will be quicker,” he added, but only because Waymo proved it out first.

The former Google self-driving car project got where it is by starting early and focusing on the idea of commercial services from the start, Navigant’s Abuelsamid said. Around 2009, Google started hiring many of the key engineers from winning teams in US Defense Advanced Research Projects Agency (DARPA) races and building the program that would become Waymo in 2016.

But getting to this point has taken much more than engineering, said Stephanie Brinley, an analyst at IHS Markit.

“Waymo One is a result of Waymo’s extensive technical development and research, consumer research and testing, as well as securing agreements for management and service of its fleets,” Brinley said.

Stephen Lawson is a freelance writer based in San Francisco. Follow him on Twitter @sdlawsonmedia

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